Blog Hotspot for Franchise News ...

It is easier than ever to develop your franchise into a top global business, thanks to Franchise Direct. The Atlanta-based, world-leading franchise portal recently compiled its rankings of the Top 100 Global Franchises. After a number of insightful follow-up interviews with ranked franchisors, Franchise Direct can now shed some light on what takes to grow a business into a top global franchise.

As recent reporting in the Wall Street Journal shows, international development is now a profitable course for many franchises seeking new markets, as economies around the world have been somewhat slower to introduce the franchising model than the US. With its inaugural rankings of the Top 100 Global Franchises, Franchise Direct not only listed the best-performing global franchises, but it provided a blueprint to other franchises eyeing similar growth.

Interviews with franchisors with businesses on the Top 100 list showed that there is no one path to successful international expansion. Selling a master license is a common strategy, but by no means the only route, as Coffee News USA discovered.

“In those countries that are doing well, we will leave them alone. If we take back countries we will run them from here for awhile and then sell them once we have someone who can do Coffee News well there,” said Bill Buckley of Coffee News USA.

Other companies like PakMail have tailored a business model that can be easily reshaped into different foreign economies.

“We are open to further international expansion and prefer to establish master licensees outside of the U.S. The Pak Mail operating concept is pretty easy to adapt to foreign markets as evidenced by the success of our franchises in Mexico,” says PakMail’s Sandy Lasky.

There will be many cultural roadblocks for the franchisor to overcome when opening in a foreign market. “Knowing the culture, language and business processes, as well as ensuring successful product distribution,” are some of the problems that PuroClean encountered when it launched its Canadian operation. However, it found a solution that changed the way it did business in the country.

“By having a native Canadian manager running operations in Canada, PuroClean has been able to overcome typical obstacles faced when entering a foreign market,” said PuroClean’s Natalie Zupo.

Launching a franchise on a global level takes time and patience. But the rewards can be limitless, as the success of Franchise Direct’s Top 100 Franchises has shown.

No generation in American history is quite as celebrated as the Baby Boomers. They might not have changed the world like they promised in 1969, but by being the first generation to grow up with pop culture, it seemed like they would never get old. But, lo and behold, this year, Baby Boomers find themselves on the verge of the golden years. The question that many people exploring business opportunities are considering right now is this: how can I best service this huge demographic?

Anyone launching a business will want to be targeting a very defined market. But why not pitch that tent as large as possible? That is the argument of Susan Ward, who outlined ten possible areas to succeed with business via the baby boomer sector.

Some proposals are not surprising and have been proposed before on this blog. For instance, health and senior care franchises are only going to get more popular, given America’s rapidly-aging population and the recent rumpus over health care. Equally, fitness franchises stand to do well, as elderly people will need to preserve their health.

One of the most interesting suggestions comes in targeting the pet sector. According to Ward, baby boomers have elevated pets to near-human levels.

Baby boomer pets eat, sleep and do things with their people. They watch TV, they get dressed up, they have their own friends and their own doctors. They are a multi-million dollar industry!

It makes sense, too. Their children have grown up long ago, and pets fill that void. All in all, it’s a demographic that every entrepreneur needs to consider. There are many opportunities to take advantage of with this sector.

We’ve seen a lot of interesting knock-on’s for the franchising sector in the wake of the recession. The business landscape has changed so completely, but few could predict the number of opportunities that would open up for select franchise industries. Education franchises are noting mixed results.

In this case, we are specifically referring to test prep businesses. Empirical evidence states that students are staying in college longer and more people are seeking extra degrees, either to reskill themselves, take a break from the recession, or both. Given this reality, one assumes test prep franchises will be noting decent growth, as these tests gain importance.

An interesting story from the Reno Gazette-Journal says yes and no. While a traditional company like Huntington Test Center has seen a dip in numbers attending its course, PowerScore, an online teaching resource, has watched its profits rise.

“We’re seeing a lot of enrollment on classes that are on the less expensive end,” PowerScore CEO Dave Killoran said. “Through the first half of the year our SAT prep enrollment was up about 38 percent over the same period last year. ACT enrollment has been up in the range of 20 percent this year.”

The moral for entrepreneurs considering this educational franchise sector is this: people need this service more and more, but they are very limited with what they can pay. Try to find a franchise that blends affordability with quality and you should have a top business opportunity.

One of the best things about owning a franchise is that you can easily apply both your life lessons and business knowledge in a new and exciting field.

This week’s Boston Globe had a fascinating profile of New Englanders who stumbled upon the franchise dream. There’s Trish Harrington who took her daughter to a birthday party at a Snipits and ended up buying her own children’s hair dressing franchise. Or Subway owner Mehran Atoufi who took customer service skills mastered from the hotel sector and put them to work to launch his own deli franchise.

“When you have increasing unemployment, a lot of people look at starting a business as a way to provide for themselves. Franchising is one aspect of entrepreneurship that people can try to help get their business off the ground,” Robert Nelson, district director for Massachusetts in the Small Business Administration, told the Globe.

No matter what your background in life and in business is, the odds are you will find the franchise for you out there somewhere. We’ve seen it so many times.

Many people believe that starting a business through a franchise opportunity means jeopardizing your chances at career satisfaction, however studies have proven that this is not necessarily the case. It has been proven that job satisfaction depends on individual personality and attitude along with the most suitable workplace environment. This means that achieving job satisfaction depends on your own attitude as well as making the right decisions for you! Starting your own business can put you on the right road to achieving your ultimate level of job satisfaction, but it’s not for everyone. To achieve your ultimate level of job satisfaction, you must first of all consider what you deem to be career success and also how you can achieve that based on your abilities. A franchise can offer you the chance to start your own business, as well as ongoing support as your business grows and develops. However, you must ensure that you carry out a significant amount of research about a variety of franchise opportunities before investing any hard earned cash.

Tough Times
During the current economic downturn, small businesses are finding themselves in a difficult situation. While it was important previously to offer your customers a top service and great product, with so many consumers now finding themselves with a lower income, more and more consumers are becoming more and more price driven. Overhead costs haven’t come down enough for small businesses to start reducing prices however, so small business owners must become more creative when developing ways to attract customers back. David Miller, the managing director of start-up business Ruby recommends that “specialising in all channels during a period when clients are tightening their budgets seems to be a key trend among start ups, as the work becomes more consumer focused and less channel focused” (Kimberley, 11). So anyone starting a small business must ensure that they consider important factors before starting a business such as potential market, competitors, overhead costs and opportunity for growth. Having the desire to succeed and displaying an entrepreneurial mind isn’t going to guarantee your success.

Employee, Franchisee or Entrepreneur?
There are a number of choices facing individuals when it comes to career path. You can choose to go into general employment, which a large section of the population chooses. Alternatively, you can choose to become self employed. This means starting your own business, either through entrepreneurship or through a franchise opportunity. Each path offers its own benefits and pitfalls. Going down the PAYE route can offer you security and the chance to work your way up within a company, and taking risks without risking your own income. Starting a business through a franchise opportunity means becoming your own boss but also running a business according to the established standards and processes of the franchise which some can find restricting, others comforting as they can rely on the support and expertise of the franchisor. Starting your own business as an entrepreneur is probably the most risky decision, as you are going out on your own without the benefit of having a franchisor to consult when decisions are difficult to make, however you are wholly and completely your own boss and you have the freedom to make decisions how and when you want, and you also take home every penny you make. Each of these benefits and pitfalls should help you decide which path is for you. Once that path is chosen, there are a lot more decisions to make!

The Myth of the Entrepreneurial Mind
Let’s first of all dispel with the myth that only certain people are destined for the entrepreneurial path! A report by academics in Vienna University found that the myth of an entrepreneurial personality was most probably untrue, stating that the stability of a personality in general must be questioned along with the acknowledgement of the different personality traits needed at different stages in a business’ lifetime. To begin with, the personality of an individual at certain stages in their life cannot be relied upon to remain fixed, because individuals change, as influenced by events in their life.

Therefore the entrepreneur who begins a business may not, and most likely will not have the same personality after 10 years of running the business. This means that a personality will not remain stable and therefore a fixed entrepreneurial personality cannot be identified. Secondly, while certain enthusiasm and risk may be required in order to start up a business, as that business develops other traits are required in order to grow the business at a stable and healthy rate such as the ability to identify problems within a business process and enough energy and innovation to be able to implement change. The report concluded that “it is not possible to predict the long-term success of a business by evaluating the personality factors of the business founder in early stages of the start-up process” (Frank et al, 227), as the founder will no doubt change as the business changes also.  Walter Kuemmerle writes that “real entrepreneurship is a far cry from managing an established business and farther still from the sanitised model that became popular during the late 1990s.” (122), meaning that any individual looking to start their own business must first and foremost be ready to changes in line with changes in environment, market and economic conditions. Job satisfaction can only be achieved by the individual’s drive and desire to achieve goals for their business which they have already defined in line with market conditions – in other words, be realistic!

How We Believe in Ourselves
Other studies carried out by academics world-wide have linked job satisfaction to a number of factors including general personal stability and the ability to adapt to new and varying situations. A report by academics in Oxford University found that difficulty in settling into a new situation may often hinder the achievement of job satisfaction as a changing work environment can upset mood balance. It identifies the importance of Core Self Evaluations (CSE), which are the methods by which we perceive ourselves, our ideas of who we are and what qualities we believe ourselves to display. These evaluations determine the path we choose in life and how we perform in certain situations. For instance, an individual who perceives themselves to be an entrepreneur will seize the opportunity to start their own business, whereas an individual who perceives themselves as a carer, will most likely opt more towards a more appropriate role such as a doctor, hospital nurse or a home carer.

In specific job situations, it is believed the CSE also “influence what types of environment we seek and whether [we] successfully attain this environment (i.e. type or quality of job). This then leads to specific experiences at work, which determine the level of job satisfaction.” (Dormann et al, 29). CSE comprises of self-esteem, generalised self-efficacy, locus of control (LOC), and low neuroticism. These personality traits all influence how we perceive ourselves and how we feel about situations in which we find ourselves. For instance, an individual with a high LOC will feel that they have the ability to take charge of their life and implement change should they feel it needed, whereas an individual with a low LOC will feel that they are powerless in their situation, and therefore may be unhappy with where they find themselves but not be inclined to make a change.

Employers gravitate towards recruiting individuals with a stronger and more balanced Internal Locus of Control (LOC) as these individuals will function better on a team and within a workplace environment. Individuals who are more adaptable and motivated therefore will be selected more easily for jobs for which they apply and therefore will be more likely to achieve their desired level of success. Therefore, in terms of starting a business through a franchise opportunity; a franchisee with a well balanced Internal LOC will be more open to a new franchise method and be better prepared to negotiate changes with the franchisor, achieving more for their franchise business than those who aren’t willing to adapt to a proven business method.

Operating as a Franchisee
Studies into job satisfaction has also found that Core Self Evaluations play a major influence on job satisfaction but these cannot be linked to the long term success of a business, this comes by making the right decisions at the right moments. Common reasons for dissatisfaction amongst franchisees revealed in a study by Kimberley A. Morrison suggest that dissatisfaction may come about from misconceptions about franchise support and marketing initiatives made prior to the signing of the franchise agreement. This strengthens the advice that researching a franchise opportunity thoroughly is extremely important before signing anything. Dissatisfaction can also come about because franchisees feel that the franchisor doesn’t listen to their needs and implements changes in business processes that the franchisee is not entirely happy with and may actually damage their business’ performance. Speaking to previous and current franchisee is also important in this regard. Morrison’s study found that while 75% of franchisees surveyed had contacted existing franchisees, only 16% had contacted former franchisees. Both groups can offer a valuable insight into the operation of the franchise and in particular former franchisees can give information on the possibility of resale should you will to sell on your franchise business.

Morrison’s report continues to state that the majority of franchisees surveyed “did not seek information from potentially key sources such as former franchisees, UFOC documents, bankers, accountants, or lawyers” (Morrison, 38). These sources must be consulted when considering investing any amount of money into a franchise or business opportunity. Any individual investing in an opportunity like this is hinging their career and future along with the future of their family and any other dependents to the success of their business and therefore must ensure that they will have to ability to achieve their desired success. Individuals shouldn’t make a decision based on a franchisor’s pitch and should also carry out the maximum amount of research beforehand. This also means that you will make the best decision for you and therefore will invest in a franchise with which you are most compatible and most likely to achieve job satisfaction. The failure of franchisees is most likely as a result on the mis-information provided before the franchise agreements are signed or mis-interpretation of information provided. The golden rule to abide by when researching franchise opportunities is “if it looks too good to be true, then it probably is!”

Job satisfaction cannot be determined by a business model alone as it depends on the personality of the individual and their ability to achieve success. However, business success does depend on making the right decision prior to making an investment and this means carrying out an enormous amount of research before investing any funds, as well as consulting with industry professionals. Therefore, franchising should be viewed as a very viable opportunity to strengthen your career and establish a successful business. There are a large variety of franchise opportunities available on the market offering good and not so good opportunities, but with the right attitude and street smarts, you will be able to make the right decision selecting the right opportunity for you.
 

List of Works Cited
Dormann, Fay, Zapf & Frese. “A State-Trait Analysis of Job Satisfaction: On the Effect of Core Self- Evaluations”.  Applied Psychology: An International Review, 2006, 55 (1), 27–51.  Oxford, UK:  Blackwell Publishing (2006).

Frank, Lueger & Korunka. “The significance of personality in business start-up intentions, start-up  realization and business success”. Entrepreneurship & Regional Development, 19th May  2007, 227–251. Austria: Vienna University of Economics and Business Administration,  Austria  (2007).

Kimberley, Sara. “Is a recession the right time to launch a start-up?”. Precision Marketing, August 8th  2008, 11.

Kuemmerle, Walter. “A Test for the Fainthearted.” Harvard Business Review, May 2002, 122-127.  USA: Harvard University (2002).

Morrison, Kimberley A. “An Empirical Test of a Model of Franchisee Job Satisfaction”. Journal of  Small Business Management, July 1996, 27 – 41. USA: Blackwell Publishing Limited (1996).